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China 9, United States 8, Kodak 8, Washington 7, Us 6, Germany 5, D.c. 4, U.s. 4, Derek 3, Hbs 3, Willy 3, America 3, United 2, Ge 2, Maryland 2, Cal 2, Manny Mae 2, India 2, Detroit 2, Denmark 2,
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  CSPAN    Today in Washington    News/Business. News.  

    February 9, 2013
    2:00 - 6:00am EST  

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this woman came up and introduced herself as sue, of course drawn by my orange t-shirt. she is a longtime nader and captain in the u.s. coast guard. she gave me what is called a challenge coin from the u.s. coast guard, given for going above and beyond the call of duty.
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america? and second, what do you mean by needs? do you mean american labor or american capital? and when you say needs, what makes manufacturing so special? when we look at the crowd, most people here don't make things. they spend all day reading and writing and talking people. what's wrong with the service economy? why do we need a renaissance to be better? >> i'm a great fan of the service economy. i think there's an enormous amount of value created there. when we talk about america, we think about the royal "we."
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and i would also add the long-term health of the country as a place to do innovation. okay? and the principal thesis in the book that comes out of our research is that unlike the reputation that a lot of people associate with manufacturing, we actually think the ability to make things is fundamental to the ability to sustain innovation over the longer term. especially when you have products or processes. and i think that was mr. immelt referred to that earlier today. when you have processes that are not really mature, there's an enormous amount of value add that happens especially in the early stages of the commercialization. and when you give up making those products, then you're losing a lot of that tacit knowledge and over time that is going to impact your ability to do innovation. >> great. thanks. bruce, i followed you for a long time, and one thing you said at an event that struck me is when we talk about an american
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economy, it doesn't make so much sense in the aggregate because we're not really an american economy as in one economy. we are a network of state economies and even more specifically city economies. and similarly, it strikes me ma that when we talk about manufacturing as a category, that's a little overbroad, because manufacturing is, in fact, 1,000, million little subcategories that add up to this bls o bea category of manufacturing. you broke down and said here's what specific cities are doing well and can have lessons for the american economy in the aggregate. what are some specific manufacturing sub sectors that are the cutting leading edge that the rest of this super subsector can learn from? >> top 100 metros in the united states, they sit on 12% of our landmass, they're two-thirds of our population, three-quarters of our gdp, and on every asset and indicator that matters they're at 75%, 80%, 85%, 90% of national share.
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so it's really hard to talk about an american economy. you have to talk about a network of met meth rho poll tan economies and same throughout the rest of the world. for a long time i think we focused a lot on the consumption economy. you know, and a walmart is a walmart is a walmart. you know, whether it's in phoenix or pittsburgh or denver or detroit. right? same footprint, same design. same prices. same wages. when you start looking at advance industry or advanced manufacturing, what you begin to see is the effect of clusters and the concentration of the effect of manufacturing -- and this obviously goes back for some period of time -- locating near advanced r&d institutions, locating near skilled labor. whether it's community college or even going back into the high schools. so automotive, southeast michigan, northeast ohio, kentucky, tennessee, on into the south. aerospace, we'll see seattle, hartford, wichita. computer electronics. you'll see in san jose, silicon
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forest and portland down into austin. same with biomedical, et cetera, et cetera. i think what's happening post recession, because every city and every metropolis got hit hard on construction in particular, got hit hard on home building and retail, began to look at their trade sectors and began to look at their advance manufacturing sectors and basically says, say what do these sectors need to survive and prosper? do we have a skills problem? do we have an infrastructure problem with a port or an airport, with a freight system. do we have an innovation breakdown essentially between r&d institutions, prototyping and product. so the answer from a city metro perspective will then basically follow the health of their cluster and particularly with small and medium-sized firms, which we can come back to. what are they doing to essentially help these relatively small firms? some are part of a supply chain.
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some are not. basically thriving. >> thanks. john, you said a funny thing in the green room. you said, you know, no matter how badly washington screws everything up, essentially cal tech will still with be cal tech and m.i.t. will still be m.i.t. it's impossible not to see everything through d.c.-tinted glasses but when you're out there out side the beltway world, there's a different reality. you talked about the importance of partnerships forming, public and private, at a local level. can you tell us a little bit about why partnerships are so key and then share a story from your time in the private sector about how you've seen the power of partnerships? >> i don't mind referring to the real world vest the nonreal world. i'm not usually here. i spend most of my time not at the larger macroeconomic level but with companies and seeing what kind of problems they're having, what they're struggling with. and it's true. in the same way that jeff immelt says he's not so worried about ge, ge will be fine, it will
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work through the issue, but a lot of smes we have to worry about. i'm not worried we'll get left behind as a nation in terps of developing all these wonderful technologies that the previous panel was talking about and that we've heard about all day. we will do that. we have the smartest people in the world at cal tech and m.i.t. what we don't off don is take it to the next step of working together, to bring that to bear so economies move forward, businesses are doing well and we have jobs. that has been my concern for a long time and continues to be so. this morning there was a large discussion of partnerships. i think we just heard about networks at the community level. jeff immelt talked about teaming and the importance of that in terms of being successful. at the corporate level. i think this is so very true. it's also something that we aren't necessarily always so good at. what we have to do is find ways
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to bring that technology and combine it with social technologies so that we have social technical systems at the large corporate level, at the community level, and also at the very front lines of value creation level as well. i first got involved with this and thinking a little bit about the national policies 30-some-odd years ago, spent some years working for toyota before they brought their system here to the united states. they hired me to be the person to work in toyota city to help transfer the system to the u.s. i was doing that so i could learn what they had and then share it here with my country. and i did that over the years. as we went through a process of determining what skills are necessary and one of the wonderful consensus items that came up today was the fact we need education. the basic skills that come from education and community college is so important. the one criteria we have as we started working with uaw, working with general motors, to
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find the right kind of employees to work in a system that brings technologies and people together was team-based problem solving innovation skills. this goes back 30 years ago. this isn't something that's new. so i don't think the equation has actually changed now. we're reshoring, bringing a lot of manufacturing back. i think it's a matter of how we've come to understand the cost when we start moving things overseas without fully understanding all the implications. so how we can have people working together with technology is going to be the key to how well we can be successful. >> great. thanks. immelt also mentioned the power of team building, his characteristics he wants in a current ge employee. rob, who other things immelt said i want to push to to you now that you're his lawyer. >> or a friend. one, he said that the future of manufacturing employment looked great, there was going to be not only nominal growth but also that manufacturing growth had a chance of increasing as a
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share of total employment of the labor force. he also said that he was extremely bullish on 3d technology. when i look at these two things side by side, i see on the one hand he thinks there's going on a lot more manufacturing work, we'll bring back more labor to the united states, more work done here, at the same time, there's this new cutting-enl on the horizon technology that is labor and time saving, that does at a certain level replace hours worked and replace jobs. so when you're thinking about this impossible and also constant tradeoff between manufacturing, productivity growth, and manufacturing employment, what are some of the best ways to think about the problems we're facing and how to solve them? >> you said a key thing. when you said there's a chance we'll have strong employment growth and manufacturing. there are a lot of ifs in that equation. we've had strong growth in productivity and manufacturing for decades. in the '90s, it averaged 4% a
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year and employment manufacturing was roughly stable. lost about 2% of total jobs in that decade. in the last decade we've lost 5.7 million manufacturing jobs. we've also had 4% productivity growth. it's actually been a little slower in the past decade. what's different? in the last decade we've seen an enormous increase in the u.s. trade deficits with the rest of the world, especially with countries like china. and today i happened to release a report which looks at the effect of currency manipulation, which is perhaps the single most important factor which explains the growth of the trade deficit. i've shown that in limiting that trade deficit -- sorry, eliminating currency manipulation could reduce that trade deficit by roughly $190 billion to $400 billion and create between 2.2 million and 4.7 million jobs. doing that would increase manufacturing employment by up to 1 million jobs. that's a big down payment on the hole we've created in
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manufacturing employment. soy think one of the things we need to do is create demand for more manufacturing products. that's what we did many the 1990s but didn't do in the last decade. if the demand was, there it went to foreign sources. we need to shift that to domestically produced goods and that will result in the hiring of domestic workers. we need those jobs because manufacturing jobs are among the best jobs for workers, especially those without a college degree. they pay high wages, have good benefits compared to other kinds of work in the economy. >> thanks. bruce, you know, you work in washington, d.c., right off du possibility, if i remember correctly. >> that's right. i'm mostly on a plane, though. >> that's what i was about to say, you are mostly on a plane. in washington, d.c., industrial policy is a dirty word. >> right. >> but if you go any other domestic flight will land you in a city that practices something that looks to me something a lot like industrial policy. they are picking winners and losers.
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they are betting on and giving tax credits to specific companies and trying to build clusters. what's the best way to think about industrial policy and its role in giving us exactly this, advanced manufacturing system that keeps -- >> so, fist, just one shot at the capital, which is just that we do have industrial policy in washington, d.c. it's called real estate sector and the mortgage interest rate deduction. we have decided to pick winners and that's partly why we had the consumption binge we had. but when you get to the local level and the question is what's your choice with economic development policy, there are some cities that frankly over a period of time practice what i would call starbucks stealing business. how quickly do we build with public money the next convention center or the next performing arts facility or the next sports stadium, or do we try to throw money to bring a firm lit literally across a boarder in many cases. or other alternative, can we
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strengthen our strengths in the traded sectors. that portion of our economy, it might be 20%, 25%, 30% of the economy, that really drives everything else. i think that's what's begun to happen post recession, particularly as we're beginning to see a bit of reassuring, the shale gas, the sense we might begin to have a manufacturing moment. mayors more importantly, business leaders, firms, universities, and the skills area basically saying what do we have here, particularly in the small and medium-sized enterprises and what do they need. i think the biggest response they get for most of these firms is we're facing industrial worker retirements to some extent. and we have no feeder system in our locality or metropolis because we got rid of it for a large extent. so what we're basically working on really across the country is what we call race to the shop, right, where we can bring back
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sort of a 21st century kind of technical training customized to these very differentiated special clusters in particular laces. >> right. willie, about five minutes ago i said that there was a tension between productivity growth and manufacturing, competitiveness, and job creation here in the united states. and i said that, and as i was saying it, i wanted to correct myself or at least throw in a couple catch yachts. your time at kodak -- you spent 7 1/2 years at eastman kodak -- suggests there isn't such a clear tradeoff. maybe it is possible to have rising competitiveness in the united states and rising job creation. there are lessons from some companies that have outsourced too quickly, that have lost competitiveness. can you tell us about the kodak story and how they kodaked themselves? >> right. well, i spent 28 years in industry, and i've been at hbs for six years now. when you're in industry, you have all these problems every day and, you know, every day is
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a crisis, especially when i went into kodak. every day was a crisis. you don't have time to sort out these problems. since coming to hbs i've been kind of working through that list of problems. one of my colleagues said, willy, you've always been an academic. you just did a 28-year field experiment and you're just interpreting the data. my interpretation is he's a little slow interpreting the da data. one of the things we found, i walked into kodak and they said we want to build digital cameras in the united states and we know the labor cost differential is really high so we're going to show you this automated factory we bought. magnificent. but all the components have to come from japan. in those days, it was in the 1990s, it was relatively early, there was still a lot of that kind of tacit knowledge that you needed. in reviewing the history and analyzing this problem, it's like, well, back in the 1960s, photography was all about film. all the profit was in the film, none of the profit was in the
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camera, so somebody probably an mb a-trained at harvard, said if you get rid of the camera manufacturing your profits will go up. they did. sure enough, offshored the camera manufacturing, profits went up. at the same time electronics industry ships all of the assembly tv assembly offshore. and everybody made more money doing that, right. and then the problem was the technology changed. and all of a sudden all the things that weren't important -- electronic sensor, lens, little motors, view finders, all those types of components, there was no longer any capability to make those in new york anymore. and there are repeated examples of that. that's where we came up with this notion of the industrial commons and the health of the industrial commons is really important to being able to sustain your ability to innovate. a and, you know, do company leaders then think more broadly about the capabilities, my suppliers, the educational institutions to train my
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workers, you know, component manufacturer, toolmakers, all of those things. it's a classic derek harden tragedy of the commons problem. >> right. rob, does the government have a role in helping companies like kodak not kodak themselves? are there laws we can pass right here that can nudge people away from outsourcing not only jobs but also their intellectual capital and their ability to grow in the future? >> absolutely. i think there's no question about it. i talked earlier about the demand-side policies, especially the need to level the playing field and get exchange rates right. that will cut our trade deficit about in half. but we'll still be left with a big trade deficit, and that's both a problem and an opportunity. we can bring many more jobs back if we make investments in the right kind of the supply-side policies. i can list four or five of those and we can probably talk about them the rest of the time. we need to invest. been talking about this all day,
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in technology development. we need to invest in r&d. other countries invest a lot more than we do in r&d. we need to invest more in manufacturing extension services to build these networks amongst regional firms. i've done -- a paper i just published i look at spending in germany and in japan. and on a comparative basis they're spending anywhere between 20 and 40 times as much as we are, as a share of gross domestic product on exactly those kinds of extension activities. we need to work on financing in germany, for example, small and medium sized firms get their financing directly from banks. but in this country, those firms don't have access to bank capital. and so they're really constrained in access to cash. that's another area where we can contribute. i like to talk about the idea of creating something called a mannie mae. we have one for housing. you were talking about the
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housing problem earlier. why don't we have some sort of institution that hechs provide capital to manufacturing companies and create jobs? that would be very productive. doesn't take a lot of money, but it could be very helpful. we've already talked about investment and training. lastly, the thing we really don't do well at all is in planning. you look at the successful countries -- japan for 20 or 30 years has what's now called the ministry of economy, industry, and trade. china's had its infamous five-year plans, you know, germany does its own planning. we need to do planning to figure out how to allocate resources. we think the commerce department might do that. it does very little of it right now. >> right. rob laid out veritable buffet of thins we could possibly talk about. i don't know, john, did you want to comment on one of the last ones? i saw you writing down something for planning. and if not, i have a question for you. you mentioned earlier three terms i thought were near
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synonyms and i want to understand the difference. taling, partnership, and networks. are there meaningful differences between these terms and how can they all sort of help us think about competitiveness here at home? >> well, i think the same thing, different levels, different fractal levels. so this morning there was a lot of discussion about partnership at the highest level, here in washington, how we can have partnership between industry and government, academia. i think that's -- i think -- and i think that an important dimension to have at play. the other thing is i think the community level, the networking is also critical. then when you get inside companies who are actually creating value, whether it's manufacturing as traditional discreet manufacturing or service, like you, i have nothing against service industries, it's about how we can promote the most effective and efficient creation of value. it turns out the way to do that is through team-based problem solving and innovation. that's been the key to successful organizations over decades now. one of the nice things, perhaps
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the only nice thing about getting older -- we're all older except you, derek -- is you can see these kind of pendulums swing over the decades. so now reshoring is the big thick. we hear sponsored by the atlantic and great series of articles in the december issue about insourcing. and there has been this trend that pendulums back and forth over the decade. first you outsource, then you offshore, and now we're reshoring. and i think another term to think about is right shoring. different things will be made in different places. as jeff immelt said, globalization is not a bad thing. i'm not going to say it's a bad thing. it's a great thing, a wonderful thing. things will be made in different places and they should be. but we can be smart about what we're doing where, and that means having deep, integrated holistic decisionmaking, understanding where we are now and also thinking longer term. there are great examples of companies that have done this
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all along, even with the hurdles sometimes washington, d.c., might throw up there. one i can think of right now is the herman miller company. makes furniture. office furniture. they've introduced some wonderful -- kind of the apple of the office furniture industry, the ames chair back in the '60s and the aeron chair that revolutionized office furniture maybe 10 or 15 years ago. if you go visit them today you'll see incredible team-based, problem solving and innovation, and they were under the same pressures that other companies were to offshore 10, 15, 20 years ago. and their main competitors did exactly that. many of them went overseas. they looked at their business and realized that just as willy was saying, discovered in his research, having operations near where we're doing our design, near our customers was important for the kind of synergies that come about. they recognized that early on and decided they could find ways to make it work, to be competitive right here. and the key was -- in fact, how to network within their company and how to have that team-based
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approach to getting work done in their company where they combine people and technologies. >> right. bruce. >> i want to build on -- i think these are excellent comments. i want to build on something rob said from the local perspective. i would add to the list infrastructure and for many small and medium-sized firms strategic advice. almost looking like for a merchant bank eventually, and some of the issues in small and medium-sized firms are about facility remodel. some is about succession planning, frankly, because a lot of these are family own and now into the third generation or so and they really have to think about that. i think what's happening in the united states is we're pushing down responsibility from a governmental perspective to the states and to the major metros, because they've become an unreliable partner. i mean, if sequestration goes through, right, in the next couple weeks, they're going to basically take a haircut to everything in nondefense discretionary, including r&d.
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right? so they're basically not making any choices and telling the states, the city, the metros, the firms, the clusters, somehow you guys are going to have to compensate for this, right? in some of these areas the states, metros, and cities can compensate and they are compensating. in some cases particularly with foreign firms coming in, they're demanding, frankly, that the locality organize themselves in such a way. you know, when seeman's comes into charlotte with the piedmont community college, they're demanding -- part of the deal is that you guys act like we act in europe. it's very interesting. but i think we're seeing a de facto redivision, resorting of responsibilities in the public sector. is this a fifth best solution, probably, but if you're a mayor, county leader, you're a governor, your attitude is we get stuff done and we're just going to go through this list and figure out either
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public/private finance or some new kind of intermediary or institution. we will figure this out. >> right. >>institution. we will physical this out. a very different mind-set and perspective. >> right. just about every single successful recovery from a financial crisis going back the last 30 years has relied on exports to help drive growth. it is very difficult under a -- after a financial crisis for domestic demand to rise quickly. we have seen that every quarter, every year since 2008 here in the states. you need to rely on other people to help fuel you. i have to admit, i have not read your book, even though i plugged it at the beginning of this panel. i will. >> we will. >> we all will. and so will they. but can you talk about your attitude towards domestic manufacturing, thinking about exports? being export first. because in the states, we're not like germany, we're not surrounded by the different countries demanding growth. we are the biggest consumer engine in the world and sometimes if you're a kansas
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manufacturer, you will just sell to nebraska. so talk a little bit about how to, you know, refocus us for an export driven world with a billion new customers. >> i think that's a really interesting and opportune question. one of the things we've been blessed with has been the world's largest market. we are still four times larger than china. so for many firms, especially the smaller ones, you know, do i work harder and develop my export business when all of this business isn't near at hand? so i think that really requires a change in mind-set, you know, denmark has been mentioned a lot. actually, i've done a lot of work in denmark lately, and you know, it is really interesting. you find all these small companies. here is the small country, 5.6 million population. you know, and 48% of their gdp is exports, right? and it is more a mentality that comes from, if i'm going to survive on this world stage, what do i have to do to do that?
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and i think we're entering that world. because, if you look today, these statistics are older. but the mobile hand set market in east asia is about 3.5 times larger than north america. china is the world's largest market for automobiles. vw sells twice as many in germany, and and bordeaux wines and well, now i think it moved to burgundy. in new world order, as you have these new consumers come on, we have to think about, and it was talked about, this large market of markets as well. the post world war ii era, and there is mention of that before, in post world war ii era, we had
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this wonderful period when we dominated mass manufacturing. there was faith in science post world war ii. science won the war, right? we made these huge investments because of the cold war, you know, that led to space technology and so on. and information technology and so on. so there was that unique time. but now times really changed because not just china, but india, brazil and other americas are going to be either are now or are growing into large markets. that makes it a particular challenge for ceos in terms of what my global footprint needs to be in terms of tapping into all those clusters, recognizing the market opportunities and then also leveraging the skills. so it is a complex problem. but it is really a different world. >> right. what a lot of people think about manufacturing products and one of the first things that comes to mind, i think, just because so many people have it, is a smart phone like the iphone and tablet. and you know, it occurs to me
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that, we can't just keep buying screens, there's like a limit to the number of screens that every family can possibly own. don't know what could possibly be left, but a phone and tablet, because we have run out of ideas. and this is certainly an annoying journalist question. because i'm asking to you do my homework for me. but if i had to write a piece about the next manufactured product that american media and american families will get hyper about, one sector that it occurs to me might be fruitful might be the medical device industry. some sort of medical device that everyone can use in their homes. so then would you have to have a manufacturing and transportation network to not only make the new thing but bring it to lots of different people's houses. can i write that piece when i go back to my office after this panel? and also, if you disagree, what's the next big idea? >> go ahead. >> if you go to the microsoft
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campus, out in seattle, in redmond and you go look at their smart home, they already are beginning to play with those kind of technologies, right? because you know, what's the inevitable demographic we have in this country? aging. we now know how the bib baby boomers field about themselves. they will demand products. so the question is, in those metropolitan areas that tend to cluster around the mayo clinic, cleveland clinic, houston medical campus. washington university, right? there is where you're going to find that sort of r & d commercializing to prototyping and then the question becomes, if you are talking about mass production here, and some kind of integrated supply chain. so no, i think we will see a burst of innovation in that field and it is this interplay
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between once our housing look like, what is our automotive sector going to look like, right? what kind of personal devices people will -- you know, carry around. and i think this is the kind of planning, frankly, that is going on in these clusters and these networks and sit # n city and metropolitan. because they are trying to figure out, what do we make now off of our business? right? and what could we make tomorrow, probably in collaboration with our training partners. because there already is a network of training cities also unmerging in the world because of supply chains. so they are not only beginning to think about it just themselves, they are beginning to think about the necessary linkages with some of the global markets, right? >> so i'm going to give what sounds like an incredibly pessimistic, but an incredibly optimistic answer. because i was in the factory in southern china that makes 50% of
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the blood glucose meeters in the world. i took a class last year to this factory in india that makes most of the acetaminophen and ibuprofen and other things that we thought were made in new jersey. it was like, hey, guess what, it is not made here. and so the question is, are the supply chains and capabilities and things for the commerciallization and industrialization of the products here? and the answer is -- a lot of them aren't. okay. now the optimistic side of this, i've been thinking about this a lot lately, the optimistic side of this, is i think we are also moving to a world where we're going to place a premium on systems, right? the reason the iphone is good is because there is a software and a whole set of compliments as manifested by the app store and all these apps and that system. and, a lot of what has been off-shored has been components.
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okay, and those guys are very good at components and lousy at systems. so that's where my hope is. and that is -- it was mentioned earlier today, cyber physical systems. that's what we mean. software plus hardware. that's the opportunity for us. >> i have a slightly different question. >> that's okay. >> i was talking to an editor at "the atlantic" about another sort of big idea, sort of, you know, business story that we could maybe bite into at the time it was sort of come into the public consciousness. not to share too much but maybe to share too much. industry after industry keeps getting bitten by the productivity bug. we see a familiar thing where there is the share of unemployment coming up and crashing back down. we see it in farming. 40% of americans were farmers in 1990. 70% were in manufacturing in the 1950s. now both those numbers are under
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10 or 5%. we are seeing the same thing happening in retail. total retail employment has been basically stagnant since the 1990s. partly because of wal-mart and partly because of amazon. is there a risk that -- is what is the risk thatter with running out of work? and if there is any chance you could tie this back into the future of manufacturing, that would be helpful to me. >> that is a certainly left-field question. thanks, derek. i don't think we will run out of work. one of the things we have seen in this country is that there's been a tremendous increase in the number of hours worked by the average family. in fact, america stand out for that. i think we are now working something close to 2,000, 2100 hours a year in the united states. so we have taken advantage of women into the labor force to really work a lot harder. if you look at people in other countries, especially in western europe, they have chosen for
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more leisure. so the average family work week is going down to 17 or 16 or 1700 hours a year. so that's substantially less. much longer vacations. much more leisure in those families. much shorter work weeks. so i think one of the great benefits of productivity growth is it can lead to availability of more leisure time. but we need to be able to generate sustainable incomes for those familyes. they have to make more than minimum wage. the problem with the model we are currently developing in the united states has been generating a lot of low-wage jobs and that's where we have seen it headed. that's why i think it is important to change course. if we continue down the course we're going down. we will see manufacturing continuing to shrink and the supply of good jobs with good wages for the 70% of americans who don't have a college degree is probably going to continue to go down. but if we can can rebuild manufacturing or at least
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stabilize manufacturing employment, then the supply of good jobs can go up. and we can spread them more widely. so people don't have to work as much. but to go back to your earlier question about exports, leading a way out of recessions, this is the point i wanted to get to. we today have strong export growth. unfortunately, we have also had strong import growth. our trade deficit has been growing. and especially in manufacturing goods. and that's where most of the jobs are. the trade numbers will come out tomorrow for 2012. they will show the trade deficit is roughly stable for last year. but if you look into the details, what you will find is that our imports of petroleum, petroleum products go down and our net imports of manufactured product will go up and that means we will have a net loss of manufacturing jobs.
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rising imports, domestic jobs, exports support them, so if on balance, the goods -- the goods trade balance gets worse, it means we are losing jobs related to trade and that's been the problem over this recovery. and that's the problem we have to address. again, back to my first point, by leveling the playing field, getting rid of things like unfair trade. >> thank you for getting the answer to the complicated question. john, can you talk about how the make-up of manufacturing jobs has changed over the last ten years because the same way that i wanted to sort of make a rule in the second question that we wouldn't talk about manufacturing as though it was just this one thing that millions of people were doing but rather a category describing many, many different things, many different workers making different product. have the technology revolutions and the force of globalization over the last 30 years changed what sort of thing we now consider manufacturing job? >> yeah, i think it lookes a little different.
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i spend again most of my time not looking at the data but in fact the reason i'm playing -- for the most part it looks remarkably like it used to. even this off-shoring phenomena, again, one of the things that happened is it set a lot of companies back. because as they sent operations overseas, kind of like the kodak story, they lost certain capabilities. then when they tried to bring it back, guess what, we don't have that capability any more. that's what ge and others are dealing with as they try to bring manufacturing back. not only that as it turns out as they bring it back, it is not actually as it was before anyway because the terrain has moved. you need different skills than you did when you sent it away. so even the term reshoring and how it relates to your question, it is the wrong term. we want to have right shoring. and when we bring things back, where we have lean shoring, as we bring it back, it needs to be in much better processes than it
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used to be and that changes each person involved in the system. but the main thing we want people to have is skills in terms of critical thinking, problem solving and innovation. the other things we can provide. and that's true. we have been talking about education today in terms of community colleges. we talk about workers. we haven't talked enough about managers. managers that come out of our business schools. we are very proud of having the best business schools in the world and engineering schools but h honestly speaking, i'm glad that willy is from harvard business school and bringing 28 years of experience there, what happens with our business schools is they are dominated by finance departments and teaching analysis where they tend to put manufacturing in a little box. and its commodity. just go buy it wherever it is cheapest. that was very wrong thinking, i think all along. i think now a lot of managers learned, that not the best way it approach it. a lot of that began in business schools. we invented business schools and they can be a wonderful thing but i think we need to make sure
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that we are teaching this kind of holistic thinking. not only critical problem solving skills and community colleges to workers, but our managers as well. and that's what is going to lead then to, i think a different kind of world moving forward. the kind of jobs, so i don't know what the macro number of jobs will be. i don't look at that kind of thing. but as percentage of the manufacturing jobs that do exist in the world, right? productivity will reduce that number. but the percentage of the companies will have be based here and be based where the markets are, i think, will increase. and that again, changes what it looks like on the factory floor. changes what those jobs look like. >> i want to finish with you both. >> can we pitch stories? >> yeah, feel free. you have my e-mail. can you talk a little bit about the sort of community and community college response to this and how colleges in some cities are responding to this --
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to a perceived, at least, deficit of workers with the skills we need to be competitive and in the manufacturing that's right for those cities especially and willy, i want to go to you to talk about how schools have sort of changed the conception of what it means to be a manufacturing manager. >> i think there are a lot of success stories at city metropolitan scale. you may not have everything in one particular place but it is right to think about it as an eco system. so in the perfect ideal place, your four-year college will have some kind of advanced r & d unit oriented to your cluster. the community college, and this is particularly strong in places like ohio and places like michigan, will have curriculum, which frankly manufacturers tend to write and tend to oversea, organized around their skills needs. the most interesting thing we're beginning to see is that push back into the high schools,
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right? so you are beginning to see manufacturing high schools. some charters. some public. there's one in the austin neighborhood of chicago. which actually still has a descent manufacturing base. kids are coming in from that neighborhood, which is a classic inner city neighborhood. fourth, fifth grade reading and math skills. if they sort of pursue this. they have nim's credentials to basically go into the local factories. i wouldn't say it is just community colleges. i would say it cuts across the sort of secondary, post secondary, special skills units. some of the larger companies have their own training. but it tends to be part of a broader eco system which tends to get aligned with the particular cluster. and then the only question is, who pays for it, frankly. and so, i think the president had a proposal last year, i think $8 billion investment in community colleges. we had another proposal, a
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billion dollars in advance industry innovation hub. my sense is more and more, this is going to get paid for at the local level or at the state level. >> great. >> can you talk a little bit about -- >> so i'm going to tell you a short story, which has a lot of bearing. one of the things that i do is i place as many students at hbs into manufacturing or production type positions that i can. and two weeks ago, one of the students that i placed in a manufacturing operation came back to me and it was wonderful. she was so happy, you know, having such a great time, you know, working with real stuff and producing products and she said, the hardest thing was when she first went into that place, explaining to people repeatedly why would someone with an mba from har shaharvard business co come here? that tells me that the manufacturing of dirty work, we heard about that earlier
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today -- i tell you, i worked in industry for 28 years and making stuff is the most gratifying job you can have. set that aside. let me tell you about a course i'm offering this semester because the administration had been suggesting, you know, willy, we got to have people -- you know, help more on the management of these technology and science-based businesses. you got to do this. so i said, okay, i will target these students. the admissions office were looking for more engineers and scientists coming in for me to work with. great. i do a survey and all those guys were trying to change careers away from engineering and science. again, that's a broader problem in our country. so i actually completely changed course -- attack on my course. what i said is i will attack will guys going into finance and private equity. that's what i wrote on the course description. you are going into finance, venture capital, all these things, here is what you need to know about science and
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technology. you need to take this course. we will see how this works. this is a realtime experiment. but i think that reflects that we need to work on the attitudes in this country. right? who are our heros? i grew up after that sputnik moment and i benefitted enorm s enormously because all of a sudden i wanted to go into the space program. i wanted to do technology, right? and it motivated a whole generation of scientists and engineers and we are still reaping benefits of that, that generation is retiring now. okay? so that is -- that's more of the question i would put out there. i think this is a critical issue for this country. i've sat in conference rooms in china. 7 million people, heart of the industrial equipment industry. i is ask, what did you study?
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energy. >> what did you study? energy. >> what did you study? manufacturing. >> it is hard it make manufacturing sexy again. the fact is, it has always been sexy. >> it is about making manufacturing big again. they shrank over the last decade. even though it grew. but we lost a third of bodies in manufacturing. >> any of you that want to send your card so i could send student to you, i'm looking to place as many as possible. >> what i said what will sooe doing at harvard business school, i mean that. you have to write a description and give certain things and you have the opportunity to go out and make things. when young people are given that opportunity, they love it. there is a tremendous explosion happening now in small start-up businesses all around the country. can you see this in different countries. where there is innovation and creativity happening, and what did you call it? >> manny mae.
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>> manny mae. that's not bad at all. >> thank you. >> one of the interesting technological effects is the eharmony for engineers. okay. >> i'm making my own cluster. >> if you go into detroit, there is a firm called digiradi. they have written this program where if you are an engineering student at nsu or u-michigan and you want a summer internship, right, you basically go on-line and talk about or input what kind of job you want. if you are a small or medium sized firm in the state of michigan, you do the same. then the computer matches you up. about 65% of people who get an internship in a particular state stay there, right? so this is about the lowest cost work force development project you would ever see. right? because can you do all this app and frankly, most of these companies are hidden in plain sight. they are small. no one knew where to find them
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but suddenly you can find them on the web. there is another company based out of brooklyn called maker's row. they take designers on one hand of clothes and apparel and connect them up on-line to factories in the united states, facilities, mostly small, right? that basically make that kind ever apparel. so it is an interesting kind of technology moment here where we are now in the second and third generation of evolution so instead of just dating we can actually have people find descent jobs or designers find factories. >> i really want to keep talking about eharmony for engineers. but we are going to questions now. if anybody else has questions about eharmony for engineers, make yourselves known. start over here. >> okay. thank you. my name is tom, research phase. earlier today we talked about jack welch and his theory about
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being a barge and factory goes all over. what we kind of have evolving is that factories are going local. and we also heard emmond say, i'm an ex portener china. is it possible that they might become an importer -- and not even an importer. just sell in china, build in china, and build and sell in china and that says a few things, first of all, lee fong, i don't know if you are familiar with that firm. that is kind of going to the way side. is that an indicator. is the supply chain being eliminated? and the final question, or comment, of this, is a service called edex out of harvard. edex.org, in case you are interested. but you can take a science course by some of the best professor from harvard, mit, and
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this is raising the playing field it a level where, you know at some point, we will have some really smart people in and elsewhere and they are just not going to need us. that drives your point about export, that just ends. if you want to comment. >> if you want to answer on twitter length, i think our next segment is about to come up. >> i would argue it is all about tradability. tradability is what extent to i have to make something for local consumption. the cost of shipping something back and forth. and i think what we are seeing is rebalancing and tradability. and keep that in your mind. >> i think there is no question, that supply chains will be compressed. we saw so many things happen after the tsunami in northeast japan a couple years ago. no one knew there was one factory there making a certain kind of chip supplied in just products used all over the world. companies know the suppliers but
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not the supplier's supplier. company after company has gone back it understand @ fellow
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citizens, as we gather tonight, our nation is at war, our economy is in recession, and the civilized world faces unprecedented dangers. yet, the state of our unio and tonight, more than two centuries later, it's because of
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our people that our future is hopeful, our journey goes forward and brandon left for chile. endures. our destiny remains our choice. and tonight, more than two centuries later, it's because of our people that our future is hopeful, our journey goes forward a
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and do it again. [laughter] well. i just have to say this. thank you for that introduction, mr. president. [laughter] i have always wanted to say that. oh, hello, atlanta. if you are from the south give a shot of to make some noise if you're from the south. [applause] >> it is great to be here with so many southern activists. if your site to be in atlanta make some noise. [applause]
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this is going to be a good few days. there are many, many years when we have come together here in creating change, where we could still feel the sting of the ballot box. we were worried about the havoc that an anti lgb t president might cause for our lives, our country, and our world. we have come together in years when our renewed hopes that some state referendum would confirm a swing in the national mind-set were dashed. there have been years when we would come here to lift each other out, to assure each other that change would happen, that change was happening despite our losses and despite our fear,
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that something might never change the national sentiment, but this is not that year. this is not one of those years. this year we come together to celebrate. this year, this year was the year when enough people stood together, joined together and said it death, enough. enough was being in margent -- marginalize, being treated like we and our families and our votes don't count. [applause] women, latinos, african-americans, and progressive people of faith came together in communities across the country and made the deciding difference at the ballot box.
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last year for those of you are here you will recall that both been jealous, president of the naacp and night made an urgent call to fight the voter suppression efforts that were under way, and we did. [applause] in 2012 those who sought to deny our voices went too far. as people of color and people in poor communities went to the polls determined to have their voice, they stood there and they stood there and they stood there until they could cast their vote and be heard. that to my friends, that to my friends is victory over oppression and victory over systemic racism. [applause] it is also a victory for human dignity.
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yes, we have got to do so much more. think of this. a record number seven members of congress. we were afraid of keeping the ones we had. seven members of congress with the number of firsts. as said, including the first women senator from the great state of wisconsin, senator tammy baldwin, and in an historic first our first out bisexual member of congress representative kissed it from arizona. our first outage japanese-american congressman of california. i saw all of them earlier this month when they all got sworn in, and i tell you, they're ready to go.
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they're ready to go. the tables are turning. this year a broad coalition of voters showed up for young immigrants in maryland and approved a statewide dramatic showing our country was true opportunity looks like. and this year, as noted, voters returned barack hussain obama to the white house who has not only demonstrated with his actions that he is that most algy bt's supported president history of our country, but with his inclusion of the 1969 stonewall rebellion in his inaugural speech he squarely placed lgb t equality in the long lineage of movement that has had watershed moments from seneca falls to selma.
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and we will work to get him to say more than just. as i sat at the front of the capitol honored to attend the inauguration holding my daughter's hand, listening to the president, watching that fears bettina sonya sotomayor swearing in the vice-president hearing a more inclusive benediction, being transported by the poetry of richard bagram, a gay cuban immigrant, and, of course, the invitation by civil rights leader, well, let's just say i thought, yes, yes, this is the country are no, this is a country i want my daughter to grow up in.
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what happened on the steps of the capitol earlier this week was in so many ways remarkable. real change, but it was also made inevitable because of the work queue in this room and many across the country have done for decades. you made that happen. you made those words come out of our presidents mouth. and this year after losing 31 times at the ballot box, 31 times, but who's counting, this year we won big gun marriage. we'd be the opponents in minnesota and maine and maryland and washington state. if you are from those states,
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stand up and raise your hand so that we can applaud you. [applause] >> if you posted on facebook or twitter or otherwise encourage people to vote the right way and stand or raise your hand, if you contributed in any way to these winds, if you gave of your time or money stendhal raise your hand and let us applaud you. [applause] thank you. thank you. the task force was proud to dedicate our staff, money, grass-roots training, and development, support, social media machine, expertise in all four of the states to contribute to a history-making election. in fact, led by the task force's
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organizers and staff i would like to publicly thank our task force staff who worked on marriage, the maryland. >> translator: and against the death penalty in california. thank you, a task force staff. [applause] as always, the task force did what we do best. working at the grass-roots level organizing engaging voters demand this year we expanded that focus by mobilizing progressive people of faith. guess what, it worked. we knocked on doors, spoke to congregations, lost their grids, and had thousands of 1-on-1 conversation that changed people's hearts and change people's votes. [applause] and what makes our movement's success, this last year even
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more powerful, more meaningful, and more lasting is that it was not just the community, it was not just people who worked uncelebrated these winds. in fact, some of the very first call is that the mills that i got when the president came out last spring and when there's a quality one in state sector states after states after states , those were from leaders of civil rights, labor, women, and other non lgb t organizations. if there is one message we can take away from election night 2012 it is that we are not alone. [applause] we are not alone as a movement. we are not allowed as a people, and we need to now make sure
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that no one else's alone either. i am thinking about so many people here in the south and elsewhere that still face isolation. the activists fighting and living under george's reprehensible immigration law. i'm thinking about the young women fighting for reproductive rights and justice in the world, often unwelcoming various and those still living in branding debilitating poverty, the kind of poverty we don't even want to embellish still exists in our country because of the very fact is still does serves as a reminder that our economy and public policies still plays
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favorites. [applause] for 40 years the task force has been at the forefront of our movements work for freedom, justice, liberation, and the quality. and for 25 years we have been meeting here at creating change to share strategies to gain skills, and plan the future. forty years does not seem so long today know that there is someone that our back. the momentum of change growing and a little spring in our step, but we can never forget what it took us to get to the state, the struggles, the sacrifices, the loss of the pain we have been through as a movement. those strong shoulders and brave hearts that held